European biotech stocks: 2017 with strong results

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15.01.2018
by sw

In 2017, the stock market was a strong financial resource for the European biotech sector – with a significant volume increase in IPOs and follow-on financings compared to 2016. This says the most recent capital market report of BIOCOM.

Following the more cautious year 2016, the European biotech sector witnessed a significant volume increase in IPOs and follow-on financings in 2017. Taking all indicators into account – number and volumes of IPOs, follow-on financings and secondary listings, the 233 European biotech companies raised €5.09bn in 2017, 54% more than in 2016 (€3.30bn). Almost half of the money (42%, €2.16bn) was raised on US Nasdaq, highlighting the power of biotech-focused investors available through the US stock market. In terms of numbers, however, Europe is in the front. A majority of 15 firms opted for one of the 14 European trading centres, with four firms floating on US Nasdaq, instead.

These are the key findings of the "Analysis of European Biotech Companies on the Stock Markets: US vs Europe" released by German market analyst BIOCOM AG on the occasion of the JP Morgan Healthcare Conference, which took place from January 8 to 11 in San Francisco, US. “Overall figures for 2017 demonstrate that IPOs and listings have become established as an important instrument for European biotech companies to raise capital. With regard to volumes, however, the US stock market is much more powerful due to a greater diversity and higher number of biotech investors,” says Sandra Wirsching, responsible for the report at BIOCOM.

15 IPOs took place in Europe, 4 on US Nasdaq

According to the analysis, a total of 19 European biotech IPOs have taken place in 2017, raising a total amount of €815m. This marks an increase of 47% compared to 2016 (€556m). The majority of 15 firms opted for one of the 14 European trading centres, only four firms floated on US Nasdaq. The largest volumes were raised in the US by Swiss company ObsEva SA (€90m), German InflarX (€85.8m) and UK-based Nucana Biomed (€84.7m) on US Nasdaq. In Europe, IPOs at Nasdaq Nordic were the most successful in terms of volume: OrphaZyme (€80m, Copenhagen), BioArctic Neuroscience (€71.8m, Stockholm) and Oncopeptides (€68m, Stockholm). (See chapter "New wave of optimism")

Among the European trading centres, Paris (47) and London (44) are the top locations with the highest number of listed biotech companies. As stated in the report, cross-border stock market Euronext still is among the most attractive stock exchange for European biotech companies. Five of this year’s listings took place here. (See chapter "Focus on Euronext")

The analysis also reveals, that in 2017, a new wave of listings took place in Scandinavia, among them one in Oslo and six in Stockholm. For this reason, the Swedish capital has now caught up to Paris and London with a total of 41 listed biotech companies.

US Nasdaq experienced revival

When it comes to follow-on financings, 2017 has recovered significantly compared to 2016. A total of €4.27bn was dropped into the companies, a substantial 56% increase compared to 2016. “Investors’ enthusiasm for biotech companies has returned in 2017,” says Wirsching. This is particularly true for US Nasdaq where the market experienced a revival with an 196% increase compared to 2016. The 35 companies listed in the US attracted a combined total of €1.1bn in follow-on-financings. Half of the money came in through the five secondary listings from Verona Pharma (UK), argenx (F), Zealand Pharmaceuticals (DK), ERYtech (F), and Ablynx (BE) which amounted to a total capital of €553m alone. (See chapter "Focus on US Nasdaq")

More information about BIOCOM's "6th Analysis of European Biotech Companies on the Stock Markets: US vs Europe" as full report: